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ELECTRIC MOBILITY IN INDIA

FEB 22

Mains   > Industry and infrastructure   >   Infrastructure & Investment models   >   Urban transportation

WHY IN NEWS:

  • World largest electric vehicle company Tesla has officially entered India by registering with the Registrar of Companies as Tesla India Motors and Energy Private Ltd

BACKGROUND:

  • The government has set the target of achieving 100% electric vehicles by 2030.
  • Manufacturing and putting the electric cars on road is the vision to make India pollution free along with saving billions of dollars in fuel cost and creating new job opportunities.

WHAT ARE ELECTRIC VEHICLES?

  • Electric vehicles, unlike conventional petrol and diesel vehicles, use one or more electric motors for propulsion rather than the internal combustion engine.
  • Electric vehicles have a battery that is charged by means of electricity supply.
  • The electric energy is then stored and used to run the electric motor.
  • There are different types of electric vehicles. It includes fully electric vehicles and hybrid electric vehicles (Electric Motor + Combustion Engine).

SIGNIFICANCE OF ELECTRIC VEHICLES:

  • Mitigating Climate Change:
    • As per Climate Risk Index 2020, India’s rank has worsened from the 14th spot in 2017 to 5th in 2018 in the global vulnerability ladder.
    • This makes it all the more reason for India to make electric cars and vehicles a priority in the fight against the reliance on fossil fuels.
  • Controlling air and noise pollution:
    • Vehicles with Internal combustion (IC) engines cause half of the pollution in the cities as they emit harmful gases like Carbon Monoxide, Nitrogen Oxides >> this leads to air pollution
    • IC engines also cause noise pollution in cities.
    • On the other hand, Electric Vehicles are 100% environment-friendly as they do not emit toxic gases or smoke in the environment
    • Therefore EVs will help India in its commitment to the Paris Climate Agreement.
  • Health:
    • The air pollution induces deadly diseases particularly for elderly people, pregnant women, and children.
  • Economy:
    • Reduce oil imports:
      • India is the 5th largest importer of oil, importing more than 2.2 million barrels a day to satisfy around 70% of demand in the country.
      • Most of the consumption of oil is in the transport sector.
      • Therefore electric vehicles can significantly reduce India’s oil imports >> reduce Current Account Deficit.
    • Cost-effective:
      • With the advent of advanced technology and dedicated R&D, the cost and maintenance of electric vehicles have gone down.
      • The government is also incentivizing the use of electric vehicles by providing subsidies and lower motor taxes on EVs.
    • Less maintenance:
      • Less fluids (for oil and transmission) to change + Less Moving Parts in EVs = Less Maintenance.

DEMERITS OF ELECTRIC VEHICLES:

  • Less Range:
    • Electric engines provide only limited mileage. Complete battery recharge takes up to 8 hours and there is a lack of quick charge plug-in stations available across the country.
  • Less Power:
    • The top speed of electric cars is at 70 mph (even less for smaller electric vehicles) which makes them a poor bet with highway driving.
  • Costly:
    • Electric vehicles are costlier than gasoline-powered vehicles within the same range due to the hefty price of the lithium-ion batteries. Moreover, the insurance cost will be estimated to be higher for electric vehicles than conventional ones due to the danger of running out of power in a bad spot, its higher cost, and the dangers associated with electricity. Lastly, maintenance costs as a result of new technology and developing skills make electric cars even more costly.
  • A small amount of pollution:
    • Even though electric vehicles are classified as green cars, the toxicity of batteries is high and not all electricity is derived from renewable energy sources.

CHALLENGES FOR INDIA IN IMPLEMENTING ELECTRIC MOBILITY:

  • Market Penetration:
    • Currently, the Indian electric vehicles’ market penetration is one of the lowest in the world.
  • Building charging infrastructure:
    • A big challenge is the development of charging infrastructure which will need to be combined with existing refuelling stations and at alternative locations closer to homes.
  • Limited grid capacity:
    • According to a Niti Aayog report, India’s EVs market needs a minimum of 10 GW of cells by 2022, which would need to be expanded to about 50 GW by 2025.
    • However, currently, India is able to add only 20 GW every year to its grid for all of our other increasing energy needs
  • Lack of battery cell manufacturing:
    • There is a complete absence of primary battery cell manufacturing in India which poses the risk of increasing trade deficit.
    • At the moment, most manufacturers rely on batteries imported from Japan, China, Korea and Europe.
    • Further India does not have any known reserves of lithium and cobalt
  • Policy issues:
    • An uncertain policy environment and the lack of supporting infrastructure are major challenges of implementing EVs across India.
  • High GST rate for EVs:
    • Less incentive for manufacturers/consumers to invest in or buy EVs.

INITIATIVES TAKEN

  • The National Electric Mobility Mission Plan (NEMMP) 2013:
    • It seeks to achieve national fuel security by promoting hybrid and electric vehicles in the country.
    • It sets an ambitious target to achieve 6-7 million sales of hybrid and electric vehicles every year from 2020 onwards.
    • The government has also announced the scheme named Faster Adoption and Manufacturing of (Hybrid&) Electric Vehicles (FAME India) under NEMMP
  • Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME India)
    • The scheme was launched in 2015
    • It aims to promote early adoption and market creation of both hybrid and electric vehicles in the country through upfront incentive on the purchase of electric vehicles and also by way of establishing a necessary charging Infrastructure for electric vehicles.
  • Other initiatives:
    • Taxation:
      • Indirect tax: GST on EVs is reduced to 5% from the current rate of 12%.
      • Direct taxation: The government has extended an additional income tax deduction of Rs 1.5 Lakh on interest paid on loans to the buyers of Electric Vehicle
    • For charging infrastructure:
      • Ministry of Power has allowed the sale of electricity as ‘service’ for the charging of electric vehicles.
      • This would serve as an incentive to attract investments into the charging infrastructure.
    • Green number plate:
      • MoRTH has issued a notification for the Green Number plate for the use of Electric Vehicles.

WAY FORWARD:

  • Increasing R&D in EVs:
    • Creating a vibrant battery research and development ecosystem domestically to develop alternative technologies containing minerals with low supply risks and battery recycling techniques to recover the raw materials in the batteries.
  • Increase demand:
    • More focus should be given towards the creation of demand by making it easy and cheap for consumers to switch to electric vehicles.
  • Rationalize subsidies:
    • The focus should also shift from subsidising vehicles to subsidizing batteries as batteries take up 50% of EV costs.
    • And more incentives should be given for electric two-wheelers and three-wheeler segments than four-wheelers.
  • Retrofitting:
    • Retrofitting (addition of a new component/technology) existing small vehicles can be considered for a nominal cost for consumers.
    • Example: CNG fleet of Delhi’s auto-rickshaws can be turned into an all-electric/hybrid fleet at a very low cost to owners. But it will require some innovative finance on the part of the government.
  • Sensitizing public:
    • Breaking away the old norms and establishing a new consumer behaviour is always a challenge.
    • Thus, a lot of sensitisation and education is needed, in order to bust several myths and promote EVs within the Indian market.
  • Raw material:
    • Acquiring lithium fields in Bolivia, Australia and Chile could become as important as buying oil fields since India needs raw material to manufacture batteries for EVs.
    • India could also diversify the supply risk by including lithium in existing Preferential Trade Agreements (PTAs) or creating new PTAs with other lithium producing countries.
  • Charging points:
    • A wide network of charging stations is required for attracting investments.
    • Tech Parks, public bus depots and Multiplexes are some of the potential places to install charging points.
    • Corporates shall invest in charging infrastructure under Corporate Social Responsibility (CSR).
  • Address the technical concerns:
    • Address the technical concerns such as AC versus DC charging stations, handling of peak demand, grid stability, etc. should be addressed promptly.
  • Financial incentives:
    • Government should provide a waiver of road tax and registration fees, GST refunds and free parking spaces for EVs.

PRACTICE QUESTION:

Q. How to drive growth of electric vehicles in India? Also analyze the challenges associated with National Electric Mobility Mission Plan?


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